Is Kerala on the cusp of a new migration moment? As remittance flows soar and migrant journeys take new directions, the state’s long-standing migration economy appears to be undergoing a quiet yet profound shift. The last decade has seen a transition in migration destinations, a surge in per capita remittances and a transformation in the very profile of those who migrate. Are these signs of a structural change or a temporary ripple?
A study in the RBI bulletin (March 2025) by Dhirendra Gajbhiye et al. reaffirms Kerala’s position as one of the top remittance-receiving states, noting a shift in India’s remittance sources – from declining GCC inflows to rising contributions from the USA, UK, Canada, and Australia. This trend goes with the findings of the Kerala Migration Survey (KMS) 2023, which shows Kerala’s migration to the GCC dropping from 89.2% in 2018 to 80.5% in 2023, alongside growing student and skilled migration to Western countries. The rupee depreciation has further boosted the rupee value of remittances from dollar-pegged Gulf economies.
Kerala’s remittance economy is also undergoing structural and technological changes. Mid-value transfers are rising, low-value transfers declining – signalling increased migrant incomes. KMS 2023 reports household remittances more than doubling since 2018, while 73.3% of households now receive monthly remittances. The RBI bulletin notes a growing shift toward digital and fintech platforms.
Rise of remittances and the exchange rate factor
One of the major factors behind the increase in remittance inflows to Kerala is the depreciation of the Indian Rupee (INR) against the US Dollar. As told in the Rajya Sabha on February 4, 2025, the INR fell from Rs 74.34 per USD in 2021 to Rs 86.53 in early 2025. This 16.4% depreciation translated into higher rupee earnings per dollar remitted, incentivizing migrant workers to send more money.
This correlation has been strongly endorsed by data from both KMS and RBI reports. According to the KMS 2023, total remittances to Kerala soared from Rs 85,092 crore in 2018 to Rs 2,16,893 crore in 2023 – a growth of 154.9%. Average remittance per emigrant household more than doubled, from Rs 96,185 in 2018 to Rs 2,23,729 in 2023. The RBI bulletin similarly noted that India’s remittances surged from USD 55.6 billion in 2010-11 to USD 118.7 billion in 2023-24, with Kerala remaining one of the top recipient states.
Migration destination shift: Decline of Gulf dominance
One of the most significant features of Kerala’s migration transition over the past decade is the gradual decline of Gulf dominance as the primary destination. While the GCC countries continue to host the largest number of Kerala migrants, their share has steadily decreased – from 89.2% in 2018 to 80.5% in 2023, as per the KMS 2023. This shift signals not merely a change in geography but also a clear transformation in the nature of migration itself. Simultaneously, there has been a discernible rise in migration to non-GCC countries such as the USA, UK, Canada and Australia, driven largely by student migration and the movement of skilled professionals. The RBI Bulletin 2025 corroborates this pattern, noting a rise in the UK’s share of remittances from 6.8% in 2020-21 to 10.8% in 2023-24, a shift partly attributed to the India-UK migration and mobility partnership signed in May 2021. This diversification of migration corridors not only reflects changing aspirations and opportunities but also points to the emergence of a new, globally integrated Keralite diaspora.
Kerala’s migration economy is undergoing a paradigm shift, marked by a surge in student and skilled migration. KMS 2023 reports student emigrants doubling from 1.3 lakh in 2018 to 2.5 lakh in 2023, now forming 11.3% of total emigrants. Migration increasingly starts at age 17, often leading to long-term employment abroad. The profile is more educated – 71.5% of female migrants hold degrees, compared to 34.7% of males, and 40.5% of female migrants now opt for Western countries, reflecting rising female agency and shifting migration patterns. But with far-right regimes emerging in the West, there is no guarantee that this trend will continue.
The demographic profile of Kerala migrants and returnees is changing. The female share in emigration rose from 15.8% to 19.1% between 2018 and 2023, showing gradual feminisation. Return migration also rose from 1.2 million to 1.8 million, with the UAE accounting for 36% of returnees. Many returns were involuntary, driven by job losses and visa issues, pointing to economic vulnerabilities in Gulf destinations. Kerala’s migration is thus being reconfigured, shaped by new opportunities, emerging risks and global shifts in labour and education markets.
Economic impact and remittance dependency
The role of remittances in Kerala has grown significantly, which now accounts for 23.2% of the state’s NSDP in 2023 – up from 13.5% in 2018. Remittances now amount to 1.7 times the state’s total revenue receipts, reinforcing both public and household-level finances. Per capita remittances also rose to Rs 61,118. However, this growth comes with a paradox: the share of households receiving remittances declined from 16% to 12%, indicating a concentration of remittances among fewer, higher-income households. Kerala’s remittance economy is thus becoming more capital-intensive and increasingly unequal in distribution.
The patterns and uses of remittances in Kerala have changed, reflecting shifting household priorities and financial behaviour. According to KMS 2023, a significant share is now allocated to capital expenditures – 15.8% for home/shop renovation, 14% for loan repayment, and 10% for education – highlighting remittances as both a consumption buffer and an investment tool. Notably, 73.3% of households now receive regular monthly transfers, aided by the rise of digital financial infrastructure and fintech platforms. For the first time, Kerala has also recorded outward remittances worth Rs 43,378 crore – nearly 20% of its inward remittance flow – indicating its growing role as both a recipient and sender in transnational economic networks.
Despite transformative trends, signs of migration saturation and regional rebalancing are emerging. Data from the e-Migrate portal (Lok Sabha Q844) shows Kerala’s share in emigration clearances (ECs) to GCC countries declined from 8.16% in 2021 to 4.40% in 2024, even though absolute numbers remained steady. This relative drop reflects two emerging trends: increased outmigration from northern states and a shift in Kerala’s migration towards skilled professionals and students who move through non-ECR channels. Kerala’s traditional dominance in overseas employment is thus changing, not due to a decline in migration, but due to changes in the profile and pathways of migrants.
A significant challenge in addressing Kerala’s shifting migration-remittance nexus is the persistent data gap and fragmented policy architecture. Parliamentary responses (Rajya Sabha Q392, Lok Sabha Q1246 and Q2025) highlight the lack of detailed, state-wise data on return migration, student migration and long-absent diaspora populations. The limited impact of initiatives like the SWADES programme and the ASEEM portal shows the disconnect between the scale of migration and the state’s capacity to capture its complexities. Without vibrant, disaggregated data systems, policymakers remain ill-equipped to respond to Kerala’s shifting remittance economy, shaped by global currency shifts, changing labour demands, and changing migrant demographics.
Global and structural drivers of change
Kerala’s changing migration and remittance economy must be viewed within the broader context of global economic and geopolitical shifts. The rise in remittance inflows and evolving migration patterns are not merely local developments but are shaped by international developments. A major driver has been the depreciation of the Indian Rupee alongside a strong US Dollar, making remittances more valuable in rupee terms and enhancing their economic importance for recipient households. This exchange rate advantage has acted as an external catalyst, increasing remittance volumes even as the number of emigrant households has declined.
Post-pandemic labour market disruptions have reshaped global employment opportunities, prompting return migration from low-wage sectors and encouraging a shift toward high-income, skill-oriented destinations. This transition is further driven by rising anti-migrant sentiments and labour nationalisation policies in GCC countries – like Saudization and Emiratisation – that have narrowed opportunities for foreign workers. In contrast, liberalised education and skilled visa regimes in countries such as the UK, Canada, Australia, and Germany have opened new avenues for Kerala’s educated youth, encouraging student and skilled migration.
Simultaneously, digital fintech platforms are transforming remittance flows, offering faster and more accessible alternatives to traditional banking. Together, these global and structural shifts are not only reshaping Kerala’s migration economy but also redefining its developmental path, social dynamics, and economic dependencies.
In sum, Kerala’s migration economy is shifting beyond its traditional Gulf-centric, low-skilled labour model, shaped now by global economic changes, demographic shifts and rising aspirations. Remittances continue to grow, boosted by currency depreciation and higher migrant incomes, but the migration profile has transformed which is now dominated increasingly by students, skilled professionals and educated youth heading to Western countries. This marks a perceptible reorientation of Kerala’s global engagement. Migration is now seen not just as a livelihood strategy but as a developmental opportunity in Kerala’s changing global engagement.
The author wishes to thank Dr. Irudaya Rajan (IIMAD) and Dr Dinoop K (IUCSSRE).
K.M. Seethi is Director, Inter University Centre for Social Science Research and Extension (IUCSSRE), Mahatma Gandhi University (MGU), Kerala, India. He also served as Senior Professor of International Relations and Dean of Social Sciences at MGU.